Light sweet crude for April delivery plunged 1.18 percent or $1.05 to $92.35 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for the April delivery declined 1.20 percent or $1.42 to $108.50 a barrel on the ICE futures exchange in London.

Global markets and commodities declined sharply as investors’ fear that an unprecedented bank levy by Cyprus on bank savings threatened to trigger fresh turmoil in the euro zone. The euro zone finance ministers and the International Monetary Fund (IMF) over the weekend agreed on a 10 billion euros deal for Cyprus to bolster its troubled banking sector and public finances but the country savers are being asked to make sacrifices, which has sparked widespread public anger.

Under the deal, the cash-strapped island nation was asked to impose a one-time 9.9 percent tax on all accounts over 100,000 euros and 6.75 percent on deposits less than 100,000 euros when the banks in Cyprus open Tuesday. However, the Cypriot parliament needs to approve the deal before it can become a reality. The emergency parliamentary session was scheduled to take place Sunday but it will now happen later, Monday.

“A sell-off is occurring and that’s following a general reaction from risk markets in Asia from news about Cyprus. Further weakness from here would be potentially bearish in the sense that it indicates the end of a minor upward correction against a longer-term downtrend in oil,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, told Bloomberg.

Oil futures settled at a three-week high Friday, supported by strong U.S economic data and Middle East supply concerns. Light sweet crude for April delivery gained 42 and settled at $93.45 a barrel on the New York Mercantile Exchange, while Brent crude for the April delivery gained 0.79 percent or 86 cents and settled at $109.82 a barrel.

Data released by the Federal Reserve Friday, showed that Industrial Production, which, measures the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, rose to 0.7 percent in February, above economists' forecast of 0.6 percent.